Value Priced Frozen Entrees - Low Income Consumers

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Value Priced Frozen Entrees - Low Income Consumers Desires

Several statistics indicate that low-income consumers in the United States do desire value-priced convenient meals such as frozen entrees. For example, low income and participation in a food assistance program are respectively linked with 11.2% and 26% increases in purchases of ready-to-eat foods such as frozen meals. Low-income households also eat frozen pizza or frozen meals 2.05 times a week, while high-income households eat frozen pizza or frozen meals 1.79 times a week only.

INSIGHTS FROM THE USDA

  • People who are avid consumers of ready-to-eat foods such as frozen meals are likely to be older and have lower incomes, according to the Economic Research Service of the United States Department of Agriculture (USDA). They are also inclined to be participants of the USDA's Supplemental Nutrition Assistance Program (SNAP) and members of households that reside in scant food environments where supermarkets and restaurants are few and far between.
  • Compared to middle-income consumers, low-income consumers, or consumers whose monthly income is lower than $2,000, purchase 11.2% more ready-to-eat foods, which the USDA defines as purchased foods that "can be consumed cold, at room temperature, or heated in a microwave." Participation in a food assistance program, specifically SNAP, is also linked with a 26% increase in ready-to-eat food purchases.
  • Households that are avid ready-to-eat food consumers have an average monthly income of $4,878. In contrast, households that are avid full-service restaurant food consumers have an average monthly income of $6.424, households that are avid fast food consumers have an average monthly income of $5,552, and households that are avid non-ready-to-eat food consumers have an average monthly income of $5.112.
  • Lower incomes result in households purchasing less expensive convenience foods, such as ready-to-eat foods or fast food, while higher incomes result in households purchasing more expensive convenience foods, such as foods from full-service restaurants.

INSIGHTS FROM A SCIENTIFIC STUDY

INSIGHTS FROM THE AFFI

  • The American Frozen Food Institute (AFFI) reports, however, that the core consumers of frozen food, such as frozen entrees, include all income levels, men, older millennials, children aged 7-12 at home, consumers residing in urban and suburban areas, and households composed of 3-4 people.
  • Convenience, ease of preparation, taste, and price are the top reasons consumers purchase frozen food. Frozen entrees, which are a $9.2-billion industry in the country, have a household penetration of 85.5%.

INSIGHTS FROM THE HARTMAN GROUP

Part
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Part
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Grocery Stores - Choosing Value Priced Frozen Entrees to Keep in Stock: Low Income Consumer

Convenience foods, such as value-priced frozen entrees, are a good idea for grocery stores in the United States to keep on shelf because low-income consumers are inclined to purchase convenience foods from grocery stores instead of fast food or full-service restaurants. However, full-service grocery stores are rare in food deserts or low-income communities, and people residing in these areas typically rely on the smaller convenience stores. An initiative where convenience stores in food deserts carry frozen meals has been launched recently, and initial test results look promising.

GROCERY STORES AND CONVENIENCE FOODS

  • Low-income consumers tend to buy convenience foods from grocery stores rather than fast food restaurants or full-service restaurants. This is not surprising given that convenience foods from restaurants, whether fast food or full-service, typically cost more than convenience foods from grocery stores.
  • Convenience food purchases shift from ready-to-eat foods from grocery stores to meals from fast food or full-service restaurants as household incomes increase.
  • Compared to middle-income consumers with monthly incomes between $2,000 and $5,000, low-income consumers with monthly incomes below $2,000 purchase 11.2% more ready-to-eat foods, foods purchased from grocery stores that "can be consumed cold, at room temperature, or heated in a microwave." They also purchase 32.7% less full service restaurant foods.
  • Low-income consumers face financial, food access, and transportation constraints and are therefore less inclined than the average consumer to order in, dine at restaurants, or buy fresh foods. They are more inclined than the average consumer to purchase frozen meals or foods that are cheaper and easier to prepare, and have longer shelf lives.
  • Low-income consumers, particularly those belonging to households with annual incomes below $25,000, sometimes, often, or always feel that the following factors make it hard for them to access healthy foods: price (68%), quality of items on offer (43%), time to shop (38%), selection of items on offer (38%), physical disabilities (32%), distance to store (27%), lack of transportation (25%), and store hours (23%). These figures suggest that low-income consumers prefer to have a grocery store nearby that has a wide selection of affordable, nutritious, and easy-to-prepare foods.

FOOD DESERTS AND CONVENIENCE FOODS

  • Six percent of the country's population resides in food deserts, defined by the United States Department of Agriculture (USDA) as low-income areas where a third of the residents are over a mile from a supermarket (for urban areas) or over 10 miles from a supermarket (for rural areas). In food deserts, residents typically do not have access to grocery stores or supermarkets. They rely on convenience stores instead.
  • It appears to be a good idea for convenience stores to carry convenience foods such as frozen entrees because as the USDA reported, low-income consumers are more inclined to buy cheaper convenience foods from grocery stores than expensive convenience foods from restaurants. The closest things to grocery stores that people in food deserts have are convenience stores.
  • Also, results of early tests of convenience stores carrying frozen meals appear promising. Alice Ammerman, a distinguished nutrition professor at the University of North Carolina's Gillings School of Public Health, recently launched Good Bowls, an initiative to bring affordable, nutritious, locally-sourced frozen meals to low-income communities. The initiative, which allows convenience stores in food deserts to carry and sell frozen meals, is already gaining traction and seeing success.
  • As Ammerman was able to observe, convenience stores carrying affordable and nutritious frozen meals are a boon to low-income communities because it reduces barriers to healthy food access. For example, people who do not have the time to cook their own meals can just buy from these convenience stores. Affordable and nutritious frozen meals, with their long shelf life, are a great alternative to the highly-processed and low-nutrition foods that convenience stores typically offer.
  • It is important to note, however, that building and opening larger stores, say grocery stores or supermarkets, in food deserts do not guarantee any improvement in how low-income consumers eat. There are studies showing that opening a grocery store or supermarket has little effect on food choice. Deeper, underlying factors such as race, education, income, and nutritional knowledge need to be addressed.
  • Dollar stores Dollar General and Dollar Tree appear to be capitalizing on the lack of grocery stores and supermarkets in food deserts. Dollar General and Dollar Tree account for around two-thirds of new stores in food deserts. These dollar stores have fresh and frozen products on offer, but some people argue that these stores take business away from independent grocers that provide higher-quality products.
Part
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Part
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Low Income Consumers - Understanding Nutrition

Compared to high-income consumers, low-income consumers appear to have limited nutritional knowledge. Convenience foods, such as frozen meals or entrees, are commonly associated with low nutritional value, though frozen food manufacturers are now taking steps to change this perception by reformulating and developing more nutritious products. Most low-income consumers say food quality and nutritional value are a purchase consideration, but with their limited financial resources and the day-to-day pressures they face, they understandably prioritize convenience and affordability over nutrition and food quality.

CONVENIENCE AND AFFORDABILITY PRIORITIZED OVER NUTRITION AND FOOD QUALITY

  • According to The Hartman Group, a management consulting firm, "consumers across all income levels share similar social and political attitudes as well as similar general attitudes around eating, cooking, and health + wellness." This suggests that, similar to the average consumer, low-income consumers seek frozen foods that have the following characteristics: healthier ingredients (48%), better nutritional value (47%), no artificial ingredients (41%), healthier preparation (39%), minimal processing (33%), and short ingredient list (28%).
  • However, since low-income consumers have limited financial resources and limited access to full-service grocery stores, they are likely to sacrifice nutrition and food quality for convenience and low prices.

LACK OF NUTRITIONAL KNOWLEDGE AND AWARENESS

  • The Borderless Charity, which seeks better food access for the less fortunate, explains that there is no food shortage in the country and low-income households are unable to eat healthier for several reasons. According to the non-profit organization, low-income consumers have limited access to healthy food because of financial constraints and geographic barriers, and they have an inadequate knowledge and awareness of the nutritional value, pricing, and availability of food. Their perception of high quality food affordability is also amiss.
  • The non-profit organization observes that in low-income communities, there is an obvious lack of knowledge on the significance of eating and serving healthy and nutritious food. Most people in these communities do not know which foods are high in nutritional value. They have more pressing concerns on their mind, and putting food on the table is difficult enough.
  • Food deserts have long been blamed for the eating habits of low-income consumers, but economists at Stanford University, New York University, and the University of Chicago find that differences in education, income, and nutritional knowledge have greater influence over food choices and eating habits than geographical location. Newly opened supermarkets in food deserts attract shoppers, but the food purchasing and eating habits of these low-income consumers remain the same. These low-income consumers still buy products that are low in nutritional value.
  • Nutritional knowledge accounts for 7% of the link between healthy eating and income, while education accounts for around 20%. For this reason, the aforementioned economists recommend that policies surrounding healthy eating in low-income communities center on increasing knowledge and awareness.

NUTRITIONAL CONTENT AS A PURCHASE CRITERIA

  • The types of stores that low-income consumers typically have access to are convenience stores and dollar stores. Unlike larger or full-service grocery stores, convenience stores and dollar stores are known to offer food products that are highly processed and low in nutritional value. Rural Grocery Initiative Director Dr. David Procter, for example, says that "grocery stores have more variety and a higher quantity of healthy foods than do dollar stores."
  • Frozen foods are typically associated with low nutritional value and high preservative and sodium content, but frozen food manufacturers are now reformulating and developing healthier products. Higher nutritional values and food quality, however, allow manufacturers to charge higher. To illustrate, the frozen meals of Cederlane, Kashi, and PF Chang's are priced between $17.63/kg and $23.68/kg, while the frozen meals of Banquet and Michelina's are priced below $5.00/kg.
  • Value-oriented and low-income consumers, who find frozen meals convenient and affordable, find that the product experience (81%), the quality of items (75%), and the price and size (74%) strongly influence their food purchases. The product experience encompasses aspects such as taste, time savings, availability, convenience, and feelings of fullness, while the quality of items encompasses aspects such as nutritional content, ingredients, freshness, and label certifications. Price and size include whether the product can be used up entirely.
  • Considering the early success of Good Bowls, an initiative where convenience stores in food deserts carry and sell nutritious but cheap frozen meals, low-income communities may only need to be presented with affordable and accessible healthy options, and taught that even though they are on a tight budget, they can still eat healthy.
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